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Rising aluminum costs cut into Ford's profit

When Ford reports fourth-quarter results on Wednesday afternoon, it is expected to fret that rising metals costs have cut into profits, even as rivals say they have the problem under control. Aluminum prices have risen 20 percent in the last year and nearly 11 percent since Dec. 11. Steel prices have risen just over 9 percent in the last year. Ford uses more aluminum in its vehicles than its rivals. Aluminum is lighter but far more expensive than steel, closing at $2,229 per tonne on Tuesday. U.S. steel futures closed at $677 per ton (0.91 metric tonnes). Republican U.S. President Donald Trump's administration is weighing whether to impose tariffs on imported steel and aluminum, which could push prices even higher. Ford gave a disappointing earnings estimate for 2017 and 2018 last week, saying the higher costs for steel, aluminum and other metals, as well as currency volatility, could cost the company $1.6 billion in 2018. Ford shares took a dive after the announcement. Ford Chief Financial Officer Bob Shanks told analysts at a conference in Detroit last week that while the company benefited from low commodity prices in 2016, rising steel prices were now the main cause of higher costs, followed by aluminum. Shanks said the automaker at times relies on foreign currencies as a "natural hedge" for some commodities but those are now going in the opposite direction, so they are not working. A Ford spokesman added that the automaker also uses a mix of contracts, hedges and indexed buying. Industry analysts point to the spike in aluminum versus steel prices as a plausible reason for Ford's problems, especially since it uses far more of the expensive metal than other major automakers. "When you look at Ford in the context of the other automakers, aluminum drives a lot of their volume and I think that is the cause" of their rising costs, said Jeff Schuster, senior vice president of forecasting at auto consultancy LMC Automotive. Other major automakers say rising commodity costs are not much of a problem. At last week's Detroit auto show, Fiat Chrysler Automobiles NV's Chief Executive Officer Sergio Marchionne reiterated its earnings guidance for 2018 and held forth on a number of topics, but did not mention metals prices. General Motors Co gave a well-received profit outlook last week and did not mention the subject. "We view changes in raw material costs as something that is manageable," a GM spokesman said in an email.

Land Rover wins legal battle over Evoque clone Land Wind X7

Luxury carmaker Jaguar Land Rover, part of Tata Motors Ltd, said it won a case in China against local rival Jiangling Motors Corp for making cars that copy features of Range Rover Evoque. Beijing Chaoyang District Court said on Friday that Evoque, whose latest model was launched in 2018, had five unique features that were copied directly in the Land Wind X7 built by Jiangling Motors, leading to widespread consumer confusion. The court ruled that all sales, manufacturing and marketing of the Land Wind X7 must stop immediately and Jaguar Land Rover be paid compensation. The two sports utility vehicles have a similar shape, with the roof and windows tapering from front to back, and near-identical tail lights and character lines on the side panelling. Britain's biggest carmaker had sued Jiangling in a rare move in 2016. Despite widespread and often blatant copying, global automakers generally don't take legal action in China as they feel the odds of winning against local firms are low. Also, a lawsuit can be bad for branding if the Chinese public think a foreign company is bullying domestic competitors. The new Range Rover Evoque will be launched in China in April 2019. Jiangling could not be immediately reached for comment.

Jaguar laying groundwork for a reborn XK

There have been rumors about plans to replace the Jaguar XK since before the gentleman's coupe ended production in 2014. Depending on which rumor you read, a reborn XK could remain compact and offer a 3.0-liter turbodiesel, grow a bit and move upmarket to challenge the Mercedes S-Class Coupe, or grow even more and challenge the Bentley Continental GT as "an elegant four-seater coupe." About the only three consistent details have been that the new XK would ride on a reworked F-Type platform, that the XK would become Jaguar's new flagship, and brand design director Ian Callum providing all the quotes about a potential resurrection. Now Hanno Kirner, the head of product strategy at Jaguar Land Rover, has added quotes that could portend the return of the big two-door cat. Kirner told Autocar that Jaguar "will continue to invest in sports cars," and that "I use the plural quite deliberately." That is, the F-Type won't be left to carry the sports car mantle by itself. Questions remain about the definition of the term "sports car," and whether that really means a return of the XK. Kirner suggested it's possible that a future offering could be "a body variant" of the F-Type. Callum's been fighting for the XK's return ever since Jaguar made the decision to kill it. The designer said the two-seat F-Type wasn't intended to kill the bigger 2+2, and at one point his team had already finished design work on the third-generation XK. However, the F-Type sold so well that the company marketers decided the automaker didn't need both cars. A number of things needs to happen before any XK gets the green light, though. The next-gen F-Type is in the works and could come as soon as next year, and Jaguar will want to make sure the two-seater continues its run of steady sales. The XK spirit lives on in the current F-Type, since the F-Type sits on a reworked version of the XK's aluminum architecture, and the second-generation F-Type will evolve that aluminum platform again. It's said that the platform could morph back into a 2+2 without undue hassle, but any new XK wouldn't likely arrive before 2021 even if approved. Callum remains on the case, saying in October 2017, "I want a two-seater [the F-Type] and a 2+2. We're working on something now." Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.